Ep. 26 Building Trust and Finding Community as a NextGen Business Owner

Ep. 26 Building Trust and Finding Community as a NextGen Business Owner

Ep. 26 Building Trust and Finding Community as a NextGen Business Owner


On today’s episode of The Ripcord Moment, Joe Seetoo welcomes Nikè Anani, author of Lifetime to Legacy, Director of Next Gen Advisory for Northern Trust Wealth Management, Co-Founder of African Family Firms, and host of The Connected Generation podcast.

Nikè Anani has first-hand experience with being a second-generation family business owner and knows how confusing and isolating a transition can feel. According to a study done by The Williams Group, only 30% of business transitions are successfully passed onto the third generation. 65% of the reasons why most transitions do not work out are due to lack of effective communication and trust and 25% was due to a lack of engagement in the next generation. Therefore, Lifetime to Legacy focuses on more qualitative and relational advice for how families can better connect, collaborate, and co-create the businesses of the future.

She also recommends NextGen business owners to have more empathy for their elders and to understand what their deepest anxieties and aspirations are. It is normal for younger owners to have their own ideas and potentially become frustrated with traditions and how things were done by older owners. However, Nikè says bringing your new ideas to the table with empathy and a reverence for the experience older people have can help the transition go more smoothly.

Nikè suggests family business owners to plan a family meeting and have collective conversations on the purpose and vision of the company and to join a community or networking group of other business owners who can act as a sounding board or a support system. She says transitions can potentially be a very stressful and lonely time for owners and it is important to have community.

Visit Nikè's website here: www.nikeanani.com

Watch previous episodes here:

Ep. 25 Creating a Niche Fashion Brand: How We Made $1M Our First Year

Ep. 24 Running a Business with Your Family: Generation Gaps & Compromise

Welcome to The Ripcord Moment. I'm your host Joe Seetoo. Today I'm joined by Nike Anani. She is an author and the book that she has done is called Lifetime to Legacy. And it's a new vision for multigenerational family businesses. She's got over a decade of experience in the family office space, working with businesses, hoping to increase their enterprise value, specifically working with the second generation who are coming in to take over these family run businesses. She's also the co-host of The Connected Generation. It's a top ten podcast focused on the family office space and again, family enterprise businesses. And lastly, she's the co-founder of African Family Firms. It's a nonprofit community that she has established again for for this space. Nike, welcome to the podcast and really excited about our discussion today.

Thank you so much. I'm really excited as well.

Oh, so let's talk about your book that you've really poured a lot of work into and this concept around Lifetime to Legacy. What is that all about?

Lifetime to legacy is really just as you're thinking through as a business founder, how do I ensure that everything that I've built would outlive me? And I'm a family business owner myself, like you said in the introduction, and I found that on our journey, I'm second generation, my father's first generation. And as we were looking at how do we pass on the baton and how do we ensure that we have continuity and sustained impacts not only over space, but also over time. A lot of the advisors that we were surrounded by, we're talking the language of the technical, they were talking the language of estate planning or tax planning or financial planning. But frankly, a lot of my experience where we got stuck was on the relational. It was around how do we make shared decision making, how do we improve our communication, how do we have good conflict resolution skills? So not just myself, my father, but our nuclear unit, right? And it was because the software, the technical was quite straightforward, I find. Right. I find a financial advisor. They told me, you know what to do to do, but for the relational it was, it was a lot more complex. And so that my first hand experience made me realize just how important legacy planning entails, not just the technical, but also the relational.

And I came across a study, a U.S. based study by the Williams Group that looked at family wealth transitions, and they found that just 30% of transitions were successfully moving to the third generation. Right. And of those for those of those 30%, the reasons why the 70% were not transitioning successfully was due to 95% was due to qualitative factors as opposed to quantitative factors. 65% was due to lack of effective communication and trust. Okay, 25% was due to lack of prepared next generation or lack of engaged next generation. 15% was due to lack of a wealth mission and just 5% was due to the traditional kind of transactional elements like your estate planning, your tax planning and your wealth planning.

So if I'm hearing you correctly saying more than half 60% was due to lack of trust and communication or communication trust, those soft factors, that is utterly amazing. What in you what do you attribute that to?

I think it's it's so all through like school in our professional lives we’re quick to speak in the language of the quantitative but not the qualitative. It's very difficult. You work with business founders who are looking at their exits, right? How often do we have the spaces and places to process? What's the meaning of money? What's the meaning of wealth? What do we want to do when you know in the event of the inevitable? Are deaths? And how do we start to engage the next generation in these conversations? These are very difficult topics to have conversations on, and typically the first gens may be fearful that starting this conversation and wealth and money and purpose may actually lead to the next generation losing their motivation, losing that drive, being derailed, so to speak. They don't want them to feel like they will have a pot of money that's there. And so they have entitlement issues that the money then taints them negatively. Leads to bad actors coming around them. Are they responsible and mature enough to handle the sensitive sensitivity of being a wealth owner or a future here, so to speak? So a lot of these emotions really stop families from having effective and clear communication on matters of money, matters of wealth, matters of the business.

Talking about the death of mom or dad is very difficult, Right? How do you bring that up now? How do you. Yeah. And so let me ask you, how have you infused that that challenging part of the conversation into the kind of work that you're doing right. Is to understand from my firsthand experience, the the fears of the next generation and the challenges they face and also the fears of the first generation and the challenges they face.

And I serve as a bridge builder, really. I serve as bringing in safety into the room so we can have those difficult conversations and I like to get my clients to be conscious of the fact that we're not talking about this singular event, the death of the founder. That's very confronting. That's very difficult to imagine. Right. We're talking about the continued continuity and the legacy of the family. So how can we reframe away from the death of the founder and start thinking about what legacy do we want to be leaving and living together? So it's a collective process and it's a continuous process that's more energizing and inspiring now. Absolutely right. Sort of what what are we building towards, right. Versus moving away from something that now has a negative feeling like you're saying or that is more, more, more fear based.

So I love this, the sort of more challenging the things that are sort of beneath the surface you're helping to bring light to to get it onto the table in a way that is positively moving the needle for the owners, bringing that that level of trust up on both sides. But on a cross board, I mean, I would imagine that the time that this takes for each family is obviously very different, given their history.

But I don't know, maybe talk a little bit about what your experience has been with that, what that looks like. It's the continuous evolution and it's a process. And frankly, I come into the room to get families to get into an effective cadence, rhythm, culture of effective community, collaboration and gaining clarity. But it doesn't stop when my engagement stops. The idea is to build up knowing effective ground rules for communicating right. How so? How do we listen to one another? How do we earn our statements? How do we understand the perspectives, the priorities and the preferences of everyone in the room and articulate our ideas and then and in a way that would resonate with them so that the families can carry on with continuous conversations and meetings? Because, I mean, it's never ending, really. Legacy planning takes years, and there's always new factors that come in. New births unfortunately exits, whether it's divorce or death or changes in the business that necessitate that we continuously have ongoing conversations. But typically when I come into a family, I've worked with families for over three years where they want me to keep on handholding them through the process, right?

I've also done just a one year engagement, for instance, just coaching a successor. So it really depends. But my spirit and the the way I work is to really set the families up, to be able to effectively communicate on their own, where they're not dependent on me to communicate.

So I want to maybe take this to the next level, and that is theoretically so in one way, you're teaching them this skill set that you're not just doing for them, you're teaching them how to do for themselves so that if you're not there, theoretically your work is sustainable, right? Like you said, it's an ongoing process. At some point they have to imagine that the identity you're trying to probably help the second generation form their own identity or their own their position within the business or if for whatever reason maybe can come back to this, like if they go a different route, what does that even look like?


And they probably have their own ideas, right? How do you so how do you get that to start to evolve in a way where they're feeling comfortable in their own voice, that the first generation is receptive to these ideas? What are some of the other tools in the toolkit that help that process along?

Well, this is major. I come across this all the time. The next generation often do have their own ideas, for it's more oriented towards tech or sustainability, diversity and inclusion. A lot of the next generation are not necessarily interested in working in the business. They want to work on it or adjacent to it or do their own thing. And so firstly, I work with each family member to get clear on their vision and their strategic priorities for the family. And a price is that I kind of start at the initial onset doing it with the individuals. Yeah, so I work with each person to really understand their values, their vision, their mission and how they would love to see things in the family enterprise broadly. Yep. And then I like to work with the siblings to form for them to form their united voice as a siblings partnership. And why? Why is that important to your process? It's important because quite often the founders are very dominant figures that can be quite intimidating, and we may have unhealthy communication patterns in the family as a result of that, where the next gens have lost their voices. Mm hmm. To be able to articulate persuasively what they'd like to see from a very like business partners.

Instead, what we see is them protesting. Okay. And right. It's really important if they come together with their siblings and they form a unified voice as business partners, they're more influential on the founder. Founders more likely to take them seriously. They seem right. They have articulated clearly the reasons for their views. And that's not to say they will get their way. By the way, I'm not. Yeah, I'm not. I'm not, you know, yeah, I didn't wave a magic wand and they'll get their way, but it's really about unity and not uniformity. But communication is key to that. Being able to communicate effectively in a way that folks would want to hear what you have to say. And so I helped them with with gaining that right.

And I love it because I can see how just taking a step back, hypothetically, right. Imagine if you're the owner and you've got three or four kids. Right. If you've got obviously the estate issues, we know the estate attorneys are harping on that. But just from a business standpoint, if you've got varying views and they're not united, that that's a headache in and of itself. So you're almost eliminating friction that otherwise probably would be there. That's a genius move, Genius move on your part.

Right. Thank you. Well, often founders may not communicate is because they don't have clarity over who will be the successor, who's competent enough, who's interested, and they may see division within the next generation themselves. Sure.

We've talked a little bit about this concept of champion change or doing that, but it sounds like getting their input, this unified front potentially from from the siblings, that's maybe flip it on its head, though, getting buy in from the first generation. What are some of the things you've learned along the way to get them more warmed up and to be receptive to this?

This incoming change from the second generation? Right. A lot of the time founders speak in a specific language, like I love Love Languages by Gary Chapman. Right. And he amazing book and he hypothesizes that we each have a language in which we share we communicate our love to others and receive love. And I think it's similar in business families, not with respect to love, but with respect to what is of importance to us.

It's really important when trying to champion change that the next generation take their time to really observe the founding generation, to understand, develop an empathy map. And I talk about this in the book. What are they thinking, feeling, seeing, hearing? What are their deepest anxieties and deepest aspirations? And any change that you want to champion has to speak to that.

For instance, Oh, we should invest in tech or we should professionalize the business. Why? Why is that of relevance to mom or dad? What are the three hot buttons and and key things that keep Mom and dad up at night? Is that, for instance, they want to see revenue growing. They want to see productivity improving. They want to see a liquidity event.

Now, anything that you are proposing has to speak to those three primary concerns. Otherwise it's literally just going over their heads. You mentioned this concept of like not working in the business. Right. Or working adjacent to the business. That requires a substantially different conversation. Talk to us about what that looks like and what your experience has been, you know, in this front.

Right. I've had a lot of experience with clients that have made transitions from one side to the other, come into the business and found it just found themselves lost in the system, trying to find their fit and find their feet, find themselves very generalist, whereas they want to really be able to see how they are meaningful contributors to the family enterprise at large.

And if care is not watched on the side of the founder and the next generation are really finding that optimal fit, what would then happen is they lose interest, get disengaged because their morale depletes and then they start looking outside to get fulfilled and to see their gifts and talents being, you know, making an impact in some other capacity, whether it's another startup of theirs or that like becoming an entrepreneur and that.

Right, whether it's working in 9 to 5 or doing some kind of social impact. So it's really important to have a guided process of integrating the next generation into the family enterprise that if they wish to work in the business, right. Understanding their strengths, weaknesses, their interests, understanding their skill sets and placing them in the appropriate role.

Quite often we have a lot of discussion about preparing the next generation for the business, but not enough about preparing the business for the next generation.

So what do you mean by that?

Professionalizing the business to a place where it's easier for the next generation to truly integrate. So do you have cleared departments? Do you have clear job descriptions that adhere to clear reporting lines? Right. Do you have an actual strategic HR function? Do you have clear KPIs for each member of staff appraisals? Do you have, you know, like a real business? Sure. Right. As opposed to this informal, informal mom and pop lifestyle where, frankly, a lot of them get lost. And so we need to think about how we preparing the business for the next step and not just preparing the next gen for the business. And equally for those that decide, well, I'm not interested in working in the business. I'd rather work on the business or on my own thing. We need to think about how we preparing them as owners because at the very least in the future they will be future owners of this business themselves. Right? But not actually in the business.

Okay. But that requires financial literacy, understanding of structuring and legal. That requires understanding of some solid business acumen, how to make strategic decisions, how to collaborate with their family members, making decisions and other stakeholders.

So let me play devil's advocate, though. But like what about the one who says I don't need to know about that stuff? Like I just want to collect my you know, I want to own my shares and collect my you know, my passive income is that is how do that.

And that's that's a common issue we do see that there’s no engagement. We may have legal ownership and not enough emotional ownership, and we get around that by finding and articulating the shared purpose, the why the was yeah let's fine cynics start with why what's that all encompassing why that engages each family member and is beyond just dollars and cents that really motivates them right and you feel that really generally is able to draw them back in a way where they're willing to make the investment to.

Right to become at least knowledgeable in some of these areas around legal, financial, strategic decision making, communication, etc.. Right now, as you allude to, it's a law. It's not investing in Apple. Right.

So your family has, I think, a manufacturing and construction business in Africa, that you're the second generation owner. One of the things that you have taken on and created is this African family firms, nonprofit community that you've built. Tell us a little bit more about that, what it does for you with the clients that you're working with, why you're so passionate about it.

The reason why I decided to co-found the African Family Firms, a nonprofit community, was in my journey. I found that it was extremely lonely. I was very intrigued about how peers were handling matters of succession, continuity, grappling as next generation, integrating into their businesses or leaving their businesses and establishing their own thing. But unfortunately, there were there was no community dedicated to family enterprise in Africa, and I thought it was...Yeah, I felt it was really important to create a safe space where folks could come into trusted circles and really share experiences, support one another, learn from each other and really grow together. And so African Family Farms has four pillars of activities. We are membership network, so we have communities, pods of 8 to 10 members that meet on a monthly basis, like a forum style peer sharing or sharing.

And then a second pillar of activity is education. We do a lot of education on succession and continuity, family governance, family wealth management and starting a family office, because a lot of the families on the continent unfortunately, are not privy to all this knowledge and expertise. The U.S. is pretty relatively mature compared to other parts of the world in this area.

But for many families in Africa, this is all very new to them. So we do a lot of rudimentary knowledge, awareness, building, third pillar of activities research with partner organizations to understand who these families are and what they're grappling with. And the fourth pillar activity is advocacy. Through pushing for policy changes on a national, regional and continental basis. I must say that area is something that we're still kind of working on. We haven't really gotten that much traction. But the other three really? Yeah, we've been fully doing that. That's quite impressive. It's truly like you're created something that wasn't even there before, but that is now really mobilizing many of these families or engaging them in a way that is meaningful for them.

But also now it sounds like you're going to be able to take that to the next level and serve the, you know, the countries, the community and the region. What do you think that something the rest of us could learn from your experience there in Africa, maybe to the rest of the world?

Right. I would say several things, but I just will name one. One is in African cultures, I mean, Africa is a continent and it's very diverse, but there's tends to be across the continent, across various cultures, a reverence of elders. So elders are deemed as wise and knowledgeable. The whatever they say is not a good question. Obviously, that has a downside when it comes to inter-generational collaboration. But I think what that does is there's this reverence of elders in the family enterprise system where they are able to provide wisdom, they're able to mediate conflict, they're able to really oversee rituals.

And so you not only have the fusing of the new and the novel with technology and new ways of doing things, but the tried and tested in the stories of the elders right? The triumphs that they've been through, which serve as avenues for collective learning, knowledge and intelligence for the family. So I think that's an area that we're relatively strong on, is really revering the elders.

I love that. I think that is candidly something that probably is not as strong in American culture and maybe even other societies that's kind of been lost. But the the experience, the wisdom, like you're saying, the rituals, those are all important things. And you know what I think it's so easy to forget was they were young ones, too. There were new technologies at their time that they were probably invigorated in, and maybe some of those things were great and maybe some of those things didn't work out. But they had the life experience that we can we can certainly learn from.

Nike, we're we're going to start to wrap it up here. I call this The Ripcord Moment because I believe when an owner goes through some sort of succession event, whether it's an exit to a third party selling to their partners or in this case, a family succession to the next generation, it's a little like jumping out of an airplane, right? They need a parachute for that safe landing. And I always ask our guests two action items that an owner should do sooner than later if they're going to be thinking about one of these succession events. And so what would be your two action items that you would say for a family going through this this transition to do sooner, sooner rather than later?

The first, I would say, is to get into conversation and plan a family meeting and start to have these collective conversations on what is the purpose, what's the vision, what's the mission? Like I said, it's it's it's a continuous process. And these are heavy topics where each family member has to really reflect on their values, their mission and their purpose.

And we have to align. And on my podcast, I did an episode a couple of months ago, episode 141 and it's titled Here's a Quick and Easy Way to Plan Your Family meeting with things to Think About. And yes, I definitely recommend that to plan a family meeting and have conversations, effective conversations that allow for all voices to be heard and align on your unified vision. The mission.

The second thing I would say is community. Like I kind of alluded to community’s so important because as business owners it can be quite isolating, selling your business, grappling with integrating the next generation. Who do you talk to about this? You're not going to talk about this at happy hour.

So you're saying get into some sort of community where they can leverage resources that you've built so that they have peers to have these conversations where they can share their experiences, they can share what they're struggling with, find other experts to bring to the table for them to move the process along for sure.

Definitely. I think there's a place for peer learning and peer experience sharing. So communities like, say, entrepreneurs, organization or young president organization or this stage where you can, you know, bond with other peers who are navigating similar transitions and where necessary, then get recommendations and references for experts that can sherpa you through that process.

Wonderful, great, great conversation.